IT pro says he threw out 7,500 bitcoins, now worth $7.5 million

As Bitcoin hits $1,000, man says bitcoin-filled hard drive is in a landfill.

Many people have a tale of a lost or broken hard drive containing some bit of precious data they wish they could recover. But perhaps no one on the planet has thrown out a hard drive as valuable as the one James Howells says is now buried in a landfill.

According to an article in The Guardian today, Howells threw out the hard drive, "rescued from a defunct Dell laptop," this past summer. "And then last Friday he realised that it held a digital wallet with 7,500 Bitcoins created for almost nothing in 2009," the story notes.

Howells, an IT pro, says his mistake likely occurred in mid-July, at which time a single bitcoin was worth about $90. Today, the value of a single bitcoin passed $1,000 for the first time, making 7,500 bitcoins worth $7.5 million.

Further Reading

According to The Guardian story, Howells did not have a backup. The drive he allegedly threw out "contains the cryptographic 'private key' that is needed to be able to access and spend the bitcoins; without it, the 'money' is lost forever."

Howells says he mined the 7,500 bitcoins in 2009. "Howells stopped mining after a week because his girlfriend complained that the laptop was getting too noisy and hot while it ran the programs to solve the complex mathematical problems needed to create new Bitcoins," The Guardian says.

He later dismantled the laptop for parts after it broke, keeping the hard drive "in a desk drawer for the next three years—until that fateful summer day when he had the clearout."

The hard drive itself is believed to be in a landfill near Newport, Wales.

"He even went down to the landfill site itself," The Guardian writes. "'I had a word with one of the guys down there, explained the situation. And he actually took me out in his truck to where the landfill site is, the current ditch they're working on. It's about the size of a football field, and he said something from three or four months ago would be about three or four feet down.'"

Howells realizes the chances of recovering his bitcoins are, sadly, not good. "I'm at the point where it's either laugh about it or cry about it," he said.

UPDATE: Some readers have questioned whether it would have been possible to mine 7,500 bitcoins in a week, even in 2009 when Bitcoin had just been introduced. We've e-mailed Howells, and he replied, "I assure you, it's genuine." He doesn't have proof of the bitcoin mining, but said, "I stumbled upon it back in February 2009, set it all up, mined for about a week and then stopped."

February 2009 was just one month after Bitcoin was introduced to the world.

The story of Howells' bitcoin loss spread without his intending it to. "I didn't ask for all this attention, I simply asked a question in an IRC chat room last night, then answered a few questions that the guys asked me, and all of a sudden this madness," he said.

Well, this speculation craze with Bitcoin is kind of interesting. It will die down and the price will drop like a rock once people realize bitcoins aren't going to catch on as a useful currency. They don't do anything useful that normal money doesn't do, and they aren't backed by any country so there is no guarantee of any market for them.

When you consider that anything you could buy with bitcoins you could instead more easily buy with dollars, it should really make you think. Oh, and it is a lot easier to confiscate real money that's been obtained illegally than it is to confiscate bitcoins that have been stolen.

I checked the underlying data (in the csv) that this chart was built on, and in February 2009, a total of 169.500 BitCoins were mined (~6053/day, 42371/week), and it seems to have produced those figures rather uniformly throughout the month. ( https://blockchain.info/charts/total-bi ... v&address= )

I believe, the fact that this individual should have mined a whooping 17.7% (7500/42371) BitCoins, on his gf's laptop, is highly unlikely. I would actually go as far as call it ridiculous!

Quite possibly he just forgot the number. Maybe it was just 750. Maybe something else. Maybe it was a longer than a week. The guy did throw his laptop away afterall, so I doubt his memory on fine details like that is very accurate. Overall a "Dude threw out lots of bit coins that are right now very valuable" is a believable story.

Hm. Well as bad as I feel for him, he's in the same boat as the rest of those (including myself) that, in the beginning, thought of Bitcoin as an interesting technology, but didn't consider the price of $0.03/BTC worth it.

Maybe someone can explain to me how something created electronically, which does not physically exist, and can be "lost forever" by losing an electronic key, is a good idea on which to base an economy. These are "currencies" that are made up at the whim of its' creator with no oversight, no regulation and no safety nets. Some call it investing, but all I see bitcoin miners investing in is computer equipment to possibly compute some numbers faster to get a small portion of a a coin that may never materialize. The only entities that prosper there are the hardware manufacturers and electric companies. When investing in actual companies, you really own a piece of it.

It's said you can't create something from nothing, so what is the "something" that gives these bitcoins value other than an artificial scarcity and media hype?

I'm not being sarcastic or meaning to piss anyone off, but I have real questions about how this is a good idea. If you can explain it to someone that semi-understands economics, please reply. If you just want to yell at me for criticizing bitcoins, don't bother.

Maybe someone can explain to me how something created electronically, which does not physically exist, and can be "lost forever" by losing an electronic key, is a good idea on which to base an economy. These are "currencies" that are made up at the whim of its' creator with no oversight, no regulation and no safety nets. Some call it investing, but all I see bitcoin miners investing in is computer equipment to possibly compute some numbers faster to get a small portion of a a coin that may never materialize. The only entities that prosper there are the hardware manufacturers and electric companies. When investing in actual companies, you really own a piece of it.

It's said you can't create something from nothing, so what is the "something" that gives these bitcoins value other than an artificial scarcity and media hype?

I'm not being sarcastic or meaning to piss anyone off, but I have real questions about how this is a good idea. If you can explain it to someone that semi-understand economics, please reply. If you just want to yell at me for criticizing bitcoins, don't bother.

It's pure speculation, but it isn't that different from other things people want for no clear rational reason. As long as someone will trade you something for bitcoins it has some worth.

That said I don't think anyone is even considering basing their economy on these...where did you come up with that idea?

If it really is worth £7.5 million, then remortgage the house, sell the car, raise some money.

For £100,000 you could probably dig up that football-pitch sized field to 5 feet down, rent a couple of fields next door to store it all (hey, land is cheap in Wales) and go through it in about a year or so. The first 50% of material you can probably go through quite quickly (bags on the top, discarded sofas, etc), and the next 50% is where the HDD will be.

Either you clear £7.4 million profit, or you're out £100k but you have an excellent story to tell.

That said I don't think anyone is even considering basing their economy on these...where did you come up with that idea?

I don't think it's going to replace the dollar or some country is going to make it a national currency, but when you can pay from things from coffee to college tuition it is a contributor (or detractor) to the economy. I was actually using "economy" it in the same terms as this Economist article http://www.economist.com/blogs/freeexchange/2013/04/exchange-rates

There are a lot of holes in this story, 7500 is a lot of coins to have mined in about a week on a laptop using CPU mining, even back in 2009. It sounds like the sort of story you'd make up because it makes a good story.

I personally threw out 9.4 or so Bitcoins back in 2010, which I had created in a very short period because it wasn't worth bothering cashing them in. I would say I should have kept them but that wouldn't have helped either because I would have cashed them in with the others I cashed in when Bitcoin hit $150.

Even if they find the drive there is little chance it's still operable after 4 months submerged in garbage and subjected to the elements.

That said I don't think anyone is even considering basing their economy on these...where did you come up with that idea?

I don't think it's going to replace the dollar or some country is going to make it a national currency, but when you can pay from things from coffee to college tuition it is a contributor (or detractor) to the economy. I was actually using "economy" it in the same terms as this Economist article http://www.economist.com/blogs/freeexchange/2013/04/exchange-rates

Honestly I don't really see the issue here. Dollars are basically only useful because people want them. That's true of every modern fiat currency. There are many companies that are of dubious value (think pre dot com bust) and while you owned a "piece" of the company, maybe what you owned was worth significantly less than you paid for the stock if it were to be sold wholesale.

This bitcoin pheonomenon is odd (I personally won't touch it), but only because it's happening so fast. There are many very comparable things in modern finance and trading, but people are used to those things. In the end, bitcoins have value because people will give you stuff for them. That could change any day, but it seems be true. If you have the courage to accept such risks, you can stand to make a lot of money (as will any betting).

Are they really worth that much, I was under the impression that it's really hard to cash out large sums these days.

It depends on what you mean by 'large sums'. If you watch http://bitcoin.clarkmoody.com, you'll routinely see 500BTC traded in just a few minutes. that's $500k. You'll see orders of 30-50 BTC snatched up routinely like nothing. You could probably trade out 7500 BTC carefully over the course of a month with no problem. If you tried to dump them all at once, however, it would probably tank the market for at least a few days.

After that, it's just a matter of becoming 'trusted' with mtgox in order to wire transfer the money to your bank account. That's usually just a matter of sending in a notarized apostille copy of your driver's license and a utility bill, if you're not already set up.

Maybe someone can explain to me how something created electronically, which does not physically exist, and can be "lost forever" by losing an electronic key, is a good idea on which to base an economy. These are "currencies" that are made up at the whim of its' creator with no oversight, no regulation and no safety nets. Some call it investing, but all I see bitcoin miners investing in is computer equipment to possibly compute some numbers faster to get a small portion of a a coin that may never materialize. The only entities that prosper there are the hardware manufacturers and electric companies. When investing in actual companies, you really own a piece of it.

It's said you can't create something from nothing, so what is the "something" that gives these bitcoins value other than an artificial scarcity and media hype?

I'm not being sarcastic or meaning to piss anyone off, but I have real questions about how this is a good idea. If you can explain it to someone that semi-understands economics, please reply. If you just want to yell at me for criticizing bitcoins, don't bother.

It's really easy to explain how data can be lost if the decryption key is lost.

Actually, there. I just did it.

What gives bitcoins value is utility. They are purely electronic tradable commoditity which (thus far, at least) cannot be forged. Since they're purely electronic, transfer time is virtually instant and neither party needs to know anything about the other, aside from a bitcoin address which can be a one-off address anyway. Since there's no central exchange required, nobody takes a cut of the coin merely for transfering them. As with all commodities, however, you will have to deal with someone else to change them from one commodity to another, and that person will take a cut (i.e. buying or selling bitcoins for national currencies)

But, then, you probably already knew this and I am likely feeding a troll :-|

$1,000 per bitcoin, huh? Sounds like it has served its primary purpose, creating wealth for the inventors out of nothing. Assuming they can actually cash them in, that is. As of June 2012 one address held 468,000+ bitcoins, a cool $468 million at today's exchange rate - but it would no doubt take years to unload them.

There are a lot of holes in this story, 7500 is a lot of coins to have mined in about a week on a laptop using CPU mining, even back in 2009. It sounds like the sort of story you'd make up because it makes a good story.

I personally threw out 9.4 or so Bitcoins back in 2010, which I had created in a very short period because it wasn't worth bothering cashing them in. I would say I should have kept them but that wouldn't have helped either because I would have cashed them in with the others I cashed in when Bitcoin hit $150.

Even if they find the drive there is little chance it's still operable after 4 months submerged in garbage and subjected to the elements.

The drive doesn't have to be operable. Don't even try to plug it in, just send it to a disaster recovery shop.

Not buying that he was okay with throwing away a drive with only 75k on it.

Something is off in this story. Although can someone explain how the bitcoin roadmap deals with essentially lost/destroyed currency? I know there is a hard cap to how much can be created but how do they account for these losses? If they predicted these losses but they end up significantly higher than expected it could throw off the long term plan.

Even if they find the drive there is little chance it's still operable after 4 months submerged in garbage and subjected to the elements.

Doubt that. If the drive is undamaged and nothing strange leaches into the drive platters, it should be trivial for a data recovery service to restore the data on the drive after only a few months even if the circuits outside are gone.

Maybe someone can explain to me how something created electronically, which does not physically exist, and can be "lost forever" by losing an electronic key, is a good idea on which to base an economy. These are "currencies" that are made up at the whim of its' creator with no oversight, no regulation and no safety nets. Some call it investing, but all I see bitcoin miners investing in is computer equipment to possibly compute some numbers faster to get a small portion of a a coin that may never materialize. The only entities that prosper there are the hardware manufacturers and electric companies. When investing in actual companies, you really own a piece of it.

It's said you can't create something from nothing, so what is the "something" that gives these bitcoins value other than an artificial scarcity and media hype?

I'm not being sarcastic or meaning to piss anyone off, but I have real questions about how this is a good idea. If you can explain it to someone that semi-understands economics, please reply. If you just want to yell at me for criticizing bitcoins, don't bother.

Some are investing, for some the value is in not having their dealings traced, be it for money laundering/tax avoidance/mild paranoia.

The attributes that make it volatile also make it desirable.

I'm glad other people questioned the validity of this, in all of 2009 somewhere around 1.6 million BC were mined, roughly 31,000 per week on average, so.... seems incredibly unlikely that he snagged 7,500 in that week.

It's said you can't create something from nothing, so what is the "something" that gives these bitcoins value other than an artificial scarcity and media hype?

You should read up on soft currency, the USD has no "something" that gives them value, they're just perceived to have value by the people who use them to trade goods.

Can you expect someone to take checks in the zombie apocalypse? Intrinsic value is something that doesn't exist for currency.

Quote:

I'm not being sarcastic or meaning to piss anyone off, but I have real questions about how this is a good idea. If you can explain it to someone that semi-understands economics, please reply. If you just want to yell at me for criticizing bitcoins, don't bother.

These are all questions that have been asked to death, you should go read the bitcoin wiki.

Are they really worth that much, I was under the impression that it's really hard to cash out large sums these days.

This is my biggest single question. If the guy had the coins I don't think he could get a where close to 7.5 million for them and selling them would take a while. People can feel free to explain how I am wrong but I see very little liquidity leaving the market. It seems like a few people control a large percentage of the supply and are easily able to artificial maintain high prices by only selling off limited amounts to new investors. When markets drop they buy up available currency and tighten their control.

I think a single sale of that many coins would crash the market by a large amount. It has been said to have been the cause of recent large price drop. A large sell order caused the price of bitcoins to drop close to 70%.

Hmm, this story seems like BS. My interest comes from how much does the rise in bitcoin price correlate to the US being given access to investigate offshore accounts? In other words, how many rich people with accounts in the Cayman Islands are now using Bitcoin for tax evasion?

...If the drive is undamaged and nothing strange leaches into the drive platters...

That's a huge if.

If we take him at his word, the drive has spent 4 months in a landfill getting rained on, run over, shoveled, graded, smashed, bumped, coated with all manner of liquid and semi-solid waste from the trash around it, dust, etc. And that's assuming it didn't get a nice crush from an in-truck compactor in transit.

While it's technically possible it has made it through relatively unscathed, I'd put better odds on a bare drive shipped via trans-Atlantic surface with postage stapled directly to the case of coming through in a recoverable state.

But even so, I think the odds of the drive surviving are considerably better than the chance that this guy's story is legit in the first place.